Missouri Revised Statutes

Districts in financial stress, factors determining--notification to
district school board, contents--board to prepare budget and education
plan, contents.

161.520. 1. By October 1, 1992, and by each October first thereafter,
the department of elementary and secondary education shall identify any
school district experiencing financial stress. The commissioner of
elementary and secondary education or his designee shall review the
information submitted on the report required by section 162.821 to identify
school districts experiencing financial stress. Further, the commissioner of
elementary and secondary education shall be authorized to obtain such
additional information from public school districts as may be necessary to
determine school districts experiencing financial stress. Annually, a
listing of school districts identified as experiencing financial stress
according to the provisions of this section shall be provided to the
governor, speaker of the house and president pro tem of the senate by the
commissioner of elementary and secondary education. For the purposes of this
section, a school district shall be identified as experiencing financial
stress if it:

(1) Has a negative balance in its teachers' or incidental funds at the
end of the most recently completed fiscal year and is not in compliance with
the provisions of section 165.021;

(2) Has a combined balance remaining in teachers' and incidental funds of
less than three percent at the end of the most recently completed fiscal year
of the amount expended from such funds during the previous fiscal year; or

(3) Did tax anticipation borrowing during the most recently completed
fiscal year for the period February first through June thirtieth to meet
expenditures of the district because of insufficient fund balances or
reserves.

2. For the purposes of this section, a school district may be identified
as experiencing financial stress if three or more of the following conditions
exist:

(1) For any of the district's funds for the most recently completed
fiscal year, expenditures exceeded receipts because of costs to the district
that are recurring;

(2) Has declining fund balances while the district is receiving state aid
under the provisions of section 163.172 for the sole purpose of increasing
salaries of teachers of the district;

(3) Has engaged in tax anticipation borrowing to meet obligated
expenditures for the period October first to December thirty-first of the
most recently completed fiscal year, and interest expense to the district
exceeded interest revenue on district funds;

(4) For the most recently completed three tax years, there is a decline
in the collection rate for current and delinquent taxes paid to the district;

(5) For the most recently completed three fiscal years, there is a
declining trend of student enrollment without a proportionate decline in the
number of professional staff, except in such districts where professional
staff have been reassigned to reduce pupil teacher ratios in the elementary
grades;

(6) For the most recently completed three fiscal years, there is a static
or an increasing trend of student enrollment while the number of professional
staff has been reduced;

(7) For the most recently completed three fiscal years, salaries paid to
nonadministrative staff have not increased;

(8) For the most recently completed three fiscal years, administrative
costs in the district have increased as measured by the percentage of total
district expenditures; or

(9) Has a declining trend or recent significant loss of assessed
valuation.

3. The department of elementary and secondary education shall notify by
November first the board of education and chief operating officer of any
school district identified as experiencing financial stress according to the
provisions of this section. The notification shall be accompanied by a copy
of the provisions contained in sections 161.520 to 161.529. Upon receiving
the notification, the board of education shall develop, or cause to have
developed, and shall approve a budget and education plan on forms provided by
the department of elementary and secondary education. The budget and
education plan shall be submitted to the department of elementary and
secondary education, signed by the officers of the board of education, within
forty-five calendar days of notification that the district has been
identified as experiencing financial stress. Minimally, the budget and
education plan submitted by the board of education shall:

(1) Give assurances that adequate educational services to students of the
district will continue uninterrupted for the remainder of the current school
year, and that the district can provide a minimum school term required by
section 163.021;

(2) Outline a procedure to be followed by the district to report to
district patrons about the financial condition of the district;

(3) Outline a procedure to be followed by the district to report to
district patrons about the impact of the financial condition of the district
on the educational services provided to students; and

(4) Detail the expenditure reduction measures, revenue increases or other
actions to be taken by the school district to address its condition of
financial stress. If requested, the department of elementary and secondary
education shall assist a board of education in the development of a budget and
education plan required by this section. Upon receipt and following review
of any budget and education plan, the commissioner of elementary and
secondary education or his designee may make suggestions to improve the plan.
Nothing in the law shall exempt a board of education from submitting a
budget and education plan to the department of elementary and secondary
education according to the provisions of this section following each such
notification that a district has been identified as experiencing financial
stress; except that, the commissioner of elementary and secondary education
may permit a board of education to make amendments to or update a budget and
education plan previously submitted to the department of elementary and
secondary education.